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IBM (IBM) Stock Analysis

This is a peer-relative look at IBM (IBM): its performance, risk, profitability, growth, financial strength, dividend, and valuation are each measured against its Software & Services peers, so every number reads in context rather than in isolation.

Company Profile

Company profile fields for IBM (IBM)
Profile ItemIBM
NameInternational Business Machines Corporation
Country/RegionUnited States
GICS SectorInformation Technology
GICS Industry GroupSoftware & Services
GICS IndustryIT Services
GICS Sub-IndustryIT Consulting & Other Services
Market Capitalization221.30 billion USD
CurrencyUSD
ExchangeNYSE
Listing DateJanuary 2, 1962
Security TypeCommon Stock

Price Performance

Cumulative Growth

IBM
GSPC
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IBM (IBM) vs. S&P 500 (GSPC): Growth of a $10,000 investment over the past five years. Adjusted for dividends and splits.

Trailing Returns

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Trailing total returns for IBM (IBM) and S&P 500 (GSPC). Returns over one year are annualized.

Calendar-Year Returns

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Calendar-year total returns for IBM (IBM) and S&P 500 (GSPC). Each bar is that year's total return, measured year-end to year-end.

Performance Metrics

IBM (IBM) metric values compared with Software & Services industry-group medians
MetricCurrent stock: IBMIndustry group median
Total Return (1Y)-2.50%-3.78%
Total Return (3Y, Annualized)20.31%4.13%
Total Return (5Y, Annualized)16.34%-7.93%

Risk Profile

Drawdown History

IBM
GSPC
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IBM (IBM) vs. S&P 500 (GSPC): Drawdown from the running peak over the past five years. Each line shows the decline from its prior peak; 0% marks a new high.

Return Distribution

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Distribution of monthly total returns for IBM (IBM) and S&P 500 (GSPC). Each bar is the share of months whose return fell in that 5% bucket.

Risk Metrics

IBM (IBM) metric values compared with Software & Services industry-group medians
MetricCurrent stock: IBMIndustry group median
Volatility (1Y, Annualized)48.44%61.43%
Beta (5Y)0.721.13
Max Drawdown (5Y)-37.50%-76.82%

Risk-Adjusted Performance

Risk-Return Positioning

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Each dot is a stock plotted by 1-year volatility (risk) and 1-year return. IBM is highlighted; the dashed line is the Capital Allocation Line from the risk-free rate through the industry median — dots above it are stronger on a risk-adjusted basis.

Risk-Adjusted Metrics

IBM (IBM) metric values compared with Software & Services industry-group medians
MetricCurrent stock: IBMIndustry group median
Sharpe Ratio (1Y)-0.14-0.15
Sortino Ratio (1Y)-0.18-0.22

Profitability

ROE (TTM)

IBM (IBM) posts ROE of 34.46%, in the upper peer quartile. That suggests the company earns more from each dollar of shareholders’ equity than most industry peers, a useful capital-efficiency signal.

IBM

Software & Services industry group

34.46%

Group distribution
Max
62.95%
IBM
34.46%
Q3
18.06%
Median
5.27%
Q1
-14.02%
Min
-59.77%
Largest peers
ORCL
53.38%
PLTR
38.10%
IBM
34.46%
MSFT
34.04%
SAP
18.32%
PANW
1.74%
CRWD
1.46%
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Where IBM (IBM) stands on ROE within its Software & Services peer group — the box is the group’s distribution and the dots its largest members.

Net Margin (TTM)

IBM (IBM) keeps 15.52% of revenue as net profit, putting net margin in the upper peer quartile. After operating costs, interest, and taxes, more of each sales dollar reaches shareholders than it does at most industry peers.

IBM

Software & Services industry group

15.52%

Group distribution
Max
41.43%
IBM
15.52%
Q3
14.96%
Median
3.57%
Q1
-6.01%
Min
-35.38%
Largest peers
PLTR
49.01%
MSFT
40.31%
ORCL
25.37%
SAP
20.41%
IBM
15.52%
PANW
2.67%
CRWD
0.83%
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Where IBM (IBM) stands on net margin within its Software & Services peer group — the box is the group’s distribution and the dots its largest members.

Operating Margin (TTM)

IBM (IBM) turns 16.55% of revenue into operating profit, putting operating margin in the upper peer quartile. Before financing and taxes enter the picture, the day-to-day business keeps more of each sales dollar than most industry peers.

IBM

Software & Services industry group

16.55%

Group distribution
Max
47.12%
IBM
16.55%
Q3
15.43%
Median
4.85%
Q1
-7.31%
Min
-39.13%
Largest peers
PLTR
47.12%
MSFT
45.11%
ORCL
36.20%
SAP
27.62%
IBM
16.55%
PANW
5.04%
CRWD
-2.26%
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Where IBM (IBM) stands on operating margin within its Software & Services peer group — the box is the group’s distribution and the dots its largest members.

Profitability Metrics

IBM (IBM) metric values compared with Software & Services industry-group medians
MetricCurrent stock: IBMIndustry group median
ROE (TTM)34.46%5.27%
ROA (TTM)5.30%1.99%
Net Margin (TTM)15.52%3.57%
Operating Margin (TTM)16.55%4.85%
Gross Margin (TTM)58.10%68.92%

Growth

Revenue Growth

IBM (IBM) grew revenue 7.62%, roughly around the peer group's normal range. Top-line momentum looks broadly typical for the industry.

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IBM (IBM): Revenue Growth across different time periods, set against Software & Services industry-group medians.

EPS Growth

IBM (IBM) grew earnings per share 73.72%, in the upper peer quartile. Per-share profits are compounding faster than at most industry peers.

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IBM (IBM): EPS Growth across different time periods, set against Software & Services industry-group medians.

Growth Metrics

IBM (IBM) metric values compared with Software & Services industry-group medians
MetricCurrent stock: IBMIndustry group median
Revenue Growth (YoY)7.62%14.65%
Revenue Growth (3Y CAGR)3.72%13.51%
EPS Growth (YoY)73.72%7.42%
EPS Growth (3Y CAGR)83.76%18.42%

Financial Strength

Current Ratio (MRQ)

IBM (IBM) has current ratio of 0.79, in the tighter-liquidity quartile for its industry. The short-term cushion is thinner than most peers carry, even if the absolute comfort level still depends on the business model.

IBM

Software & Services industry group

0.79

Group distribution
Max
5.39
Q3
2.83
Median
1.63
Q1
1.01
IBM
0.79
Min
0.03
Largest peers
PLTR
7.23
CRWD
1.57
MSFT
1.23
SAP
1.15
ORCL
1.12
PANW
0.87
IBM
0.79
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Where IBM (IBM) stands on current ratio within its Software & Services peer group — the box is the group’s distribution and the dots its largest members.

Debt / Equity (MRQ)

IBM (IBM) has debt-to-equity ratio of 1.89, in the higher-leverage quartile for its industry. The heavier reliance on borrowing can make earnings, rates, or refinancing conditions matter more.

IBM

Software & Services industry group

1.89

Group distribution
Max
2.62
IBM
1.89
Q3
1.10
Median
0.35
Q1
0.06
Min
0.00
Largest peers
ORCL
3.89
IBM
1.89
MSFT
0.29
SAP
0.22
CRWD
0.16
PANW
0.09
PLTR
0.02
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Where IBM (IBM) stands on debt-to-equity ratio within its Software & Services peer group — the box is the group’s distribution and the dots its largest members.

Financial Strength Metrics

IBM (IBM) metric values compared with Software & Services industry-group medians
MetricCurrent stock: IBMIndustry group median
Current Ratio (MRQ)0.791.63
Debt / Equity (MRQ)1.890.35
Net Debt / EBITDA3.47-0.03

Dividends

Dividend Yield (TTM)

IBM (IBM) has dividend yield of 2.87%, above the entire industry range. That headline income is large, but yields this far above peers often come from a falling share price or an at-risk payout, so dividend safety matters more than the percentage itself.

IBM

Software & Services industry group

2.87%

Group distribution
IBM
2.87%
Max
0.00%
Q3
0.00%
Median
0.00%
Q1
0.00%
Min
0.00%
Largest peers
IBM
2.87%
ORCL
1.30%
SAP
1.15%
MSFT
0.71%
PLTR
0.00%
PANW
0.00%
CRWD
0.00%
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Where IBM (IBM) stands on dividend yield within its Software & Services peer group — the box is the group’s distribution and the dots its largest members.

Dividend Payout Ratio (TTM)

IBM (IBM) has payout ratio of 59.77%, above the peer distribution for its industry. The dividend consumes more reported earnings than peers normally do, leaving unusually thin earnings cover.

IBM

Software & Services industry group

59.77%

Group distribution
IBM
59.77%
Max
0.00%
Q3
0.00%
Median
0.00%
Q1
0.00%
Min
0.00%
Largest peers
IBM
59.77%
SAP
37.53%
ORCL
34.31%
MSFT
19.83%
PLTR
0.00%
PANW
0.00%
CRWD
0.00%
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Where IBM (IBM) stands on payout ratio within its Software & Services peer group — the box is the group’s distribution and the dots its largest members.

Dividend Metrics

IBM (IBM) metric values compared with Software & Services industry-group medians
MetricCurrent stock: IBMIndustry group median
Dividend Yield (TTM)2.87%0.00%
Dividend Payout Ratio (TTM)59.77%0.00%

Valuation

P/E Ratio (TTM)

IBM (IBM) trades at P/E ratio of 20.88, near the industry’s usual earnings multiple. The stock is not showing a clear peer discount or premium on trailing earnings.

IBM

Software & Services industry group

20.88

Group distribution
Max
107.29
Q3
58.41
Median
31.75
IBM
20.88
Q1
16.98
Min
0.36
Largest peers
CRWD
5,327.50
PANW
284.84
PLTR
149.00
MSFT
27.85
SAP
27.79
ORCL
27.23
IBM
20.88
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Where IBM (IBM) stands on P/E ratio within its Software & Services peer group — the box is the group’s distribution and the dots its largest members.

P/S Ratio (TTM)

IBM (IBM) trades at 3.20 on P/S ratio, roughly in the peer group’s normal range. The market is not making a strong cheap-or-rich statement about its revenue base.

IBM

Software & Services industry group

3.20

Group distribution
Max
20.34
Q3
9.61
Median
4.72
IBM
3.20
Q1
2.37
Min
0.02
Largest peers
PLTR
68.05
CRWD
40.44
PANW
23.66
MSFT
11.18
ORCL
6.79
SAP
6.50
IBM
3.20
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Where IBM (IBM) stands on P/S ratio within its Software & Services peer group — the box is the group’s distribution and the dots its largest members.

P/B Ratio (MRQ)

IBM (IBM) trades at 6.42 on P/B ratio, roughly in line with the industry’s normal price-to-book range. Its balance sheet is not being priced at a clear discount or premium versus peers.

IBM

Software & Services industry group

6.42

Group distribution
Max
19.49
Q3
9.71
IBM
6.42
Median
4.50
Q1
2.11
Min
-4.91
Largest peers
SAP
67.70
PLTR
42.85
CRWD
42.77
ORCL
12.18
PANW
9.79
MSFT
8.39
IBM
6.42
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Where IBM (IBM) stands on P/B ratio within its Software & Services peer group — the box is the group’s distribution and the dots its largest members.

Valuation Metrics

IBM (IBM) metric values compared with Software & Services industry-group medians
MetricCurrent stock: IBMIndustry group median
P/E Ratio (TTM)20.8831.75
P/S Ratio (TTM)3.204.72
P/B Ratio (MRQ)6.424.50
Free Cash Flow Yield (TTM)5.45%3.91%